July 9, 2010

On the heels of Governor Quinn’s budget outline for Fiscal Year 2011, Comptroller Dan Hynes released a final Fiscal Year 2010 report that verified “Illinois ended the year in the worst fiscal position in its history.”

At the end of the fiscal year, which concluded on June 30, the state’s General Revenue Fund (GRF) balance was negative $4.692 billion—the lowest budgetary balance in Illinois history.

The backlog of Illinois’ unpaid bills was a historically high $4.712 billion. Last year, the backlog was $2.785 billion.

Lacking revenue to pay the state’s bills, in June it was taking a record 153 working days for the comptroller’s office to reimburse vouchers. At the same time in 2009 the delay was 99 days.

Unfortunately, the report doesn’t predict any relief on the horizon. In fact, Hynes anticipates that even with an economic boost or with additional revenue that may come from budget cuts, borrowing measures, or tax increases advanced by Governor Quinn, “the state will likely end fiscal year 2011 with a GRF bill backlog significantly higher than that at the end of fiscal year 2010.”

The report also notes that the traditional August 31 deadline (known as the “lapse period”) for the state to pay all its Fiscal Year 2010 bills has been pushed back until December 31. According to Hynes, Illinois would not be able pay its obligations by the end of August. But getting all those bills paid by December will also be a challenge.

The report notes that, “even with the extension of the state’s lapse period…it will be extremely challenging to close out fiscal year 2010 and maintain key functions of state government.” And because a large portion of the Fiscal Year 2011 revenues must be used to pay the previous year’s bills, Hynes warns that payment delays next year are likely to be even longer than what we saw in 2010.

Many find it difficult to believe the state’s budget problems have actually gotten worse under Quinn than under Rod Blagojevich, but they are significantly worse—and continue to deteriorate every day.